Drudge Report author caught in debate over Obamacare penalty claims

Eric Pfeiffer

Reporter

The SideshowMarch 22, 2014

Conservative Internet pioneer Matt Drudge has built his career on scooping up salacious gossip and breaking news stories. But Drudge himself has become the focus of attention after announcing he paid a federal tax penalty after refusing to sign up for the Affordable Care Act.

On Friday, Drudge posted a message on Twitter to his 250,000 plus followers:

Just paid the Obamacare penalty for not 'getting covered'... I'M CALLING IT A LIBERTY TAX!

Conservative outlets including Breitbart and the Washington Times jumped to his defense, echoing a later claim from Drudge himself that he was actually paying a small business or self-employed tax as part of his quarterly 2014 estimated tax payments.

The H&R Block Tax Institute told The Wire that Drudge is likely overpaying his tax debt now and that the overpayment will be deducted once the health insurance penalty is assessed early next year. However, H&R Block also said there is no formal payment calculation yet in place by the IRS for the Individual Shared Responsibility Provision. What’s more, when individuals make estimated tax payments, they cannot specify which government program their payments are going to, i.e. building roads, fighting wars or health care. So if H&R Block is right, Drudge’s claim is probably not exactly true. At best, he’s overpaying his taxes and assuming that extra money will go to his eventual penalty for not getting health insurance.

How much of an advanced payment would Drudge make to the IRS? That depends on how much money he plans to make this year. Since he almost certainly falls above the minimum wage requirements, he’d owe 1 percent of his annual income. That amount doubles next year to 2 percent before capping at 2.5 percent in 2016.

For most Americans, a 1 percent or even 2.5 percent penalty is probably less than what they’d pay for health insurance. Of course, the penalty does not grant actual coverage. It’s just a penalty fee. But for wealthier individuals, the penalty is likely to outpace what it would cost to obtain a health plan that meets the government’s minimum requirements. For example, someone earning $1 million in income this year but choosing to not get covered would owe a $10,000 penalty. Though for political pundits like Drudge, the extra penalty cost might just be worth all the attention he’s getting over his payments – even if they’re technically not due just yet.